PERTH (miningweekly.com) – Takeover target Explaurum has urged shareholders to reject a takeover offer from gold miner Ramelius Resources, after an independent expert determined that the offer was neither fair, nor reasonable.

The independent expert valued Explaurum shares at between 10.4c and 14.3c each, while the Ramelius offer was valued at between 9.5c and 12.5c a share.

Ramelius is offering one of its own shares for every four Explaurum shares held.

Explaurum on Wednesday told shareholders that the independent expert’s assessment had not taken into account the potential value of the Mace discovery, or other operating and capital cost optimisations currently being undertaken as part of a bankable feasibility study (BFS) on the Tampia gold project.

Explaurum said that in addition to the “value inadequacy” highlighted by the independent expert’s report, there were also several other key reasons why the company’s board had strong reservations around the Ramelius offer, including the company’s plan for the future development and operation of the Tampia project.

Meanwhile, the Explaurum board has urged shareholders to approve a strategic investment by fellow-listed Alkane Resources.

Alkane was planning to invest A$8-million in Explaurum for a 12.2% stake in the company.

In addition to the share placement, Explaurum will also grant Alkane 53.4-million options, exercisable by November 2019, in two tranches, with the first tranche of 18.6-million options exercisable at 13c each, and the second tranche of 34.7-million options exercisable at 14c each.

If all options were to be exercised, Alkane’s share in Explaurum will increase to 19.96%.

Explaurum said on Wednesday that the placement funds from Alkane would be used to complete the Tampia BFS, and to aggressively accelerate drilling across the Tampia region, including extensional drilling at Mace to fully test the scale potential.